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Grant For Workforce Housing Project Terminated

BERLIN – A grant meant for the Cannery Village workforce housing development has been taken away after the project failed to gain financing by the end of March.

This does not signal the end of the project or the end of any chance at grants, said Cindy Stone, director of the community development block grant program for Maryland’s Department of Housing and Community Development (DHCH).

In November 2007, Cannery Village developers, Berlin Community Development Corporation (BCDC) and Talbot County Housing Authority (TCHA), were given another four months, until the end of March 2008, to get private financing finalized, but although organizers assured the state that the deadline could be met, the financing was not definitive by the deadline.

“March 31 came and it wasn’t there,” Stone told the Berlin Mayor and Council Monday night. “We are terminating the grant.”

Typically, CDBG grants are awarded to projects with financing in place, according to Stone, but the Cannery Village project had an exception made for it after the subrecipient, then the New Beginning Covenant Church, went to the Secretary of DHCH. One of the conditions on that exception was finalized financing.

“We bill ourselves as gap funding so we want to be the last one in the door,” Stone said.

The lack of definite financing hurts the project a great deal in the agency’s “readiness points” scoring system for grant applications.

“Without the other funding in place 50 points are gone out of 150 points,” Stone said.

The town has not jeopardized its relationship with the department or its chances for further CDBG grants despite the termination, she said. The project can reapply for grant money when the private financing is solid.

“This is a very worthwhile project,” said Berlin Mayor Tom Cardinale, who asked Stone to rate the development’s chances of a grant award when the financing is in place, on a scale of ten.

“If it had the funding in place, it would rate 8, 9, 10,” Stone said. “Affordable housing is a crucial issue across the state.”

“Affordable housing is critical. It’s important to the town of Berlin,” Cardinale said. “We’ve done everything we could.”

Rev. Daryl Butts of New Beginning Covenant Church said his church did all it could do.

“We are in agreement we did all we can do,” said Butts. “It’s important for me for it not to appear that the church dropped the ball.”

BCDC President Frank Gunion said the proverbial red tape has held up the project.

“The hold up was getting through all the regulating agencies in the state. We are very close to being finished,” said Gunion. “The financing can’t be obtained ‘til we’re through all the regulating agencies…there has not been any fall down on anybody’s part at all.”

The Cannery Village has commitments for financing, but they are contingent on passing the regulatory agencies.

“We have been working due diligence, trust me,” said Don Bibb of TCHA, a partner in the development.

When the development comes back for consideration for another CDBG grant, the project will be considered along with the rest of the pool of applicants, Stone said, and not given either a higher or lower priority.

“We encourage you to reapply when funding is in place,” Stone said.

The wait could pose a problem for the project.

“We’d be jeopardizing another half million grant if we had to wait ‘til next year,” said Bibb.

The termination of the original CDBG grant could delay the workforce housing development two years, according to Gunion, if they are forced to wait until 2009 to reapply. CDBG grants are awarded in one round annually, with applications due mid-May.

“In order to make the housing affordable for the workforce housing program we have to have a certain amount of grants in place and this is one of the ones we were depending on to make the finances work,” Gunion explained after the meeting. “If we lose this grant or are unable to re-secure it, some of the other grants would begin to fall through.”

Every grant is on a different timetable.

Without the grants to defray the costs of the houses, the prices would have to be raised, which would push them out of the workforce housing price range and endanger further funding.

The final wetlands approval from the Maryland Department of the Environment could come any day, Gunion said, but he thinks there is little chance that the legally binding construction finance commitment will be signed by the May 16, CDBG grant application deadline.

The bank, which has agreed in principle to finance the Cannery Village construction, has promised to expedite the final documents once all the approvals are in to help the project make this year’s grant deadline, but Gunion is skeptical that the deadline can be met this May.

“Sooner or later we will figure out a way to get it done,” Gunion said. “There have been obstacles all along the way and we found ways to work around them or solve them.”